Any time so many bright young folks flood into Manhattan's concrete canyons to take jobs in investment banking or private equity, it's a clear sign the market has topped out.

Anyone who has enjoyed the stock market's rally this year should be absolutely terrified by the following statistic: About 32% of the latest crop of Harvard Business School graduates found work on Wall Street. Any time so many bright young folks flood into Manhattan's concrete canyons to take jobs in investment banking or private equity, it's a clear sign the market has topped out.

That, at least, is the considered opinion of Raphael Soifer, who said he has been tracking the professional beginnings of his fellow alumni since he graduated from HBS in 1965.

According to Soifer, a former banking industry analyst at Brown Brothers Harriman, any time more than 30% of Harvard MBAs take jobs on Wall Street it's a "sell" signal. Conversely, any time fewer than 10% do so, it's a "buy" signal. Anything in the middle is a "neutral" signal.

The indicator has proven its mettle over the years. In 2007, a record 41% of Harvard MBAs descended upon Wall Street just as the Dow Jones industrial average hit 14,000, a figure it hasn't reached since. But in 2009, only 28% signed on and the market rallied after the prior year's crash. Similarly, in 2000, 30% went to Wall Street, just in time for the dot-com bubble to pop. Last year, 38% came to Wall Street and the stock market went precisely nowhere.

The last time Soifer's indicator flashed a "buy" signal, by the way, was back in 1982 when the market was on the dawn of a 25-year bull run.

The thinking behind Soifer's indicator is it's a sure sign of a market peak if so many of what are thought to rank among the world's finest young minds choose to do such brain-numbing tasks as preparing PowerPoint presentations or discounted cash-flow analysis.

It's also possible that so many Harvard MBAs head into finance because executives in other industries have learned to shun these powerful harbingers of doom—or, at least, bear markets. Soifer has been conducting his study for many years, after all.

Clearly, there are shortcomings with the Harvard indicator. The sample size is small, the time measured is brief, and so forth. "Yet, for long-term investors … it's worth keeping an eye on," Soifer wrote. "Besides, it's fun!"

It's understandable if Harvard MBAs are unable to resist Wall Street's siren call. After all, those MBAs who land work there make so much more money than most people—especially their fellow classmates.

A 2008 study by Harvard economists Claudia Goldin and Lawrence Katz quantified just how much more. The survey of 6,554 alumni over the decades showed that pay for MBAs was 195% more—that is to say, nearly triple—than that of their fellow classmates. MBAs earned 46% more than those with law or medical degrees. Those earning the least were graduates who went earned Ph.D.s, suggesting many of them went into teaching or research.